Comparing the Sell-Off in Credit Markets vs Equity Markets

Once the Fed succeeds in slowing down the economy, we will begin to see more differentiation in credit markets, see chart below. So far, the sell-off in credit markets has been remarkably synchronized compared with the significant differences in returns seen in tech and value in equity markets. With inflation above 8% and projected to be 5% by the end of the year, the correction in risk assets continues.

Chart showing that credit markets are largely correcting in line with each other
Source: Bloomberg, Apollo Chief Economist